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Xbox One for $499: An OK Price, Historically Speaking

[Piece revised after publication due to a long day and slightly wrong mathematics.]

Today at its keynote during E3, MicrosoftMicrosoft finally clued us in to the price of its new Xbox One when it launches later this year: $499. Some feel the price is too high – the current top-of-the-line Xbox 360 retails for $299, which is what the original Xbox sold for in 2001. The thing is, it’s no longer 2001.

Later, the next-gen, high-end Xbox 360 Pro launched in November 2005 for $399. When adjusted to today’s dollars that becomes $475 — a step up in price point — and was also a more or less dedicated gaming device: Both of those consoles lack features the One has stock, such as Smart TV capabilities and Kinect.

The $499 price of the Xbox One is not a step up but is rather in line with past offerings. And it may not appeal to casual gamers, but it’s not supposed to. Microsoft is aiming at those who spend their time playing the latest hardcore shooters, drivers, and adventure games — all things it highlighted today following the entertainment-centric features of its reveal a few weeks ago.

That said, Microsoft did later introduce “pared down” versions of the 360 at lower prices, like the Arcade edition. We wouldn’t be surprised if we eventually see a version of the Xbox One stripped of most advanced gaming capability that would work as a set-top Smart TV box — something that’s been rumored for several months now. Maybe the Xbox Half is in our near future?

For real gamers, though, the Xbox One at $499 is right where it should be, at least when looking at the prices of its predecessors at launch. That said, it does make the console $100 more than the SonySony‘s PS4, which means it’s going to be fun watching these two consoles duke it out later this year.

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